Dameron v. Sinai Hosp. of Baltimore, Inc.

• Decision Date: 08 July 1986
• Docket Number: Civ. A. No. M-83-2835.
• Citation: 644 F. Supp. 551
• Parties: Rebecca DAMERON, on behalf of herself and all others similarly situated v. SINAI HOSPITAL OF BALTIMORE, INC.; Administrative Committee of Sinai Hospital of Baltimore, Inc.; Grace Pryor; Sinai Hospital of Baltimore, Inc. Pension Plan for Employees Covered Under the Collective Bargaining Agreement Between the National Union of Hospital and Health Care Employees, Division of R.W.D.S.U., AFL-CIO, and Its Affiliate Local District 1119 E, and Sinai Hospital of Baltimore, Inc.
• Court: U.S. District Court — District of Maryland

644 F. Supp. 551

Rebecca DAMERON, on behalf of herself and all others similarly situated v. SINAI HOSPITAL OF BALTIMORE, INC.; Administrative Committee of Sinai Hospital of Baltimore, Inc.; Grace Pryor; Sinai Hospital of Baltimore, Inc. Pension Plan for Employees Covered Under the Collective Bargaining Agreement Between the National Union of Hospital and Health Care Employees, Division of R.W.D.S.U., AFL-CIO, and Its Affiliate Local District 1119 E, and Sinai Hospital of Baltimore, Inc.

Civ. A. No. M-83-2835.

United States District Court, D. Maryland.

July 8, 1986.

Luther Blackiston, Legal Aid Bureau, Inc., Towson, Md., Gill Deford and Neal S. Dudovitz, Nat. Sr. Citizens Law Center, Los Angeles, Cal., for plaintiffs.

Leonard E. Cohen, Jeffrey Rockman and Frank, Bernstein, Conaway & Goldman, Baltimore, Md., for defendants.

MEMORANDUM AND ORDER

JAMES R. MILLER, Jr., District Judge.

The plaintiffs prevailed in this class action suit which claimed, inter alia, that the formula used by the defendants to establish the amount of the plaintiffs' pensions violated the nonforfeiture provisions of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1053(a). See Dameron v. Sinai Hospital of Baltimore, Inc., 626 F.Supp. 1012 (D.Md.1986). Pursuant to 29 U.S.C. § 1132(g), the plaintiffs have now moved for an award of attorneys' fees and costs (Paper No. 44). The defendants have filed an opposition (Paper No. 48) and the plaintiffs have filed a reply and several supplemental memoranda for more recently incurred fees (Paper Nos. 50, 56, & 61). No hearing is necessary to resolve this matter. Local Rule 6(G).

Legal Analysis

I. Should attorneys' fees be awarded?

Five factors are considered in determining whether an attorneys' fees award is appropriate in an ERISA case under 29 U.S.C. § 1132. These factors are:

"(1) the degree of the opposing parties' culpability or bad faith; (2) the ability of the opposing parties to satisfy an award of attorneys' fees; (3) whether an award of attorneys' fees against the opposing parties would deter other persons acting under similar circumstances; (4) whether the parties requesting attorneys' fees sought to benefit all participants and beneficiaries of an ERISA plan or to resolve a significant legal question regarding ERISA itself; and (5) the relative merits of the parties' positions."

Iron Workers Local No. 292 v. Bowen, 624 F.2d 1255, 1266 (5th Cir.1980) (footnote omitted); Tenneco, Inc. v. First Virginia Bank of Tidewater, No. 82-1159, 4 E.B.C. 1344, 1345 (4th Cir.1983).

Application of the five Bowen factors to the facts of this case leads to the conclusion that this is an appropriate situation for attorneys' fees.

This court determined the defendants "consciously and deliberately" established a pension plan prohibiting the use of actual Social Security salary history for many employees to offset pension benefits they paid to workers. The result was that the plaintiffs did not receive the retirement benefits to which they were entitled. This court concluded that the pension plan's definition of primary Social Security benefit, which formed the basis of the defendants' calculation formula, was "deceptive, ... like defining an `orchid' as a `dandelion.'" Dameron, 626 F.Supp. at 1023. While this court has not found that the defendants acted in "bad faith," it has held that their actions were deliberately taken to reduce benefits through what could be labeled a subterfuge.

The defendants assert they do not meet the second factor because Sinai Hospital is a nonprofit institution. No assertion is made, however, that the defendants cannot afford to pay attorneys' fees or that to be forced to do so would cause serious financial hardship.

The decision of this court invalidating the defendants' pension plan will deter others from developing or continuing similar plans. An award of attorneys' fees will put other pension plans on notice that there is a financial risk in violating ERISA in the way Sinai did. Therefore, an attorneys' fees award will significantly enhance the deterrent value of this court's prior decision.

The plaintiffs clearly sought to benefit all participants of the challenged Sinai pension system and the defendants do not dispute this.

As to the fifth and final factor, the defendants assert it is not met because (1) the court did not find their legal position without merit, (2) the ruling was based on the court's interpretation of the law rather than the plaintiffs' arguments, and (3) the court ruled in favor of the plaintiffs on only one of six claims. The court found the defendants' legal position to be without merit to the extent necessary for the court's decision. Further, the court is never limited to the caselaw cited by the parties to a suit or to their interpretations of it. When the court looks beyond the pleadings or arguments of the litigants for applicable legal precedent to support its decisionmaking, it hardly means the court has rejected the legal position of the victorious party to a lawsuit. It merely indicates that the court is fulfilling its proper role by considering all relevant legal precedent. Finally, the court did not reject five of the six claims asserted by the plaintiffs. After concluding that the defendants violated the nonforfeiture provisions of ERISA, it was "unnecessary to consider the remaining contentions of the plaintiffs." Dameron, 626 F.Supp. at 1024.

II. Calculating attorneys' fees

Once it has been determined that attorneys' fees are warranted, the court must decide what amount would be "reasonable." Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 1939, 76 L.Ed.2d 40 (1982). "The applicable law for determining attorneys' fee awards in ERISA cases is analogous to the law on fee awards in other substantive areas of the law ... especially in civil rights matters." Davidson v. Cook, 594 F.Supp. 418, 421 (E.D.Va. 1984); LeFebre v. Westinghouse Electric Corp., 549 F.Supp. 1021, 1030-31 (D.Md. 1982), rev'd on other grounds, 747 F.2d 197 (4th Cir.1982).

In calculating attorneys' fees awards, 12 factors have traditionally been examined:

"(1) the time and labor expended; (2) the novelty and difficulty of the questions raised; (3) the skill required to properly perform the legal services rendered; (4) the attorney's opportunity costs in pressing the instant litigation; (5) the customary fee for like work; (6) the attorney's expectations at the outset of the litigation; (7) the time limitations imposed by the client or circumstances; (8) the amount in controversy and the results obtained; (9) the experience, reputation and ability of the attorney; (10) the undesirability of the case within the legal community in which the suit arose; (11) the nature and length of the professional relationship between the attorney and client; and (12) attorneys' fees awards in similar cases."

Barber v. Kimbrell's, Inc., 577 F.2d 216, 226 n. 28 (4th Cir.), cert. denied, 439 U.S. 934, 99 S.Ct. 329, 58 L.Ed.2d 330 (1978). See also Unemployed Workers Organizing Committee v. Batterton, 477 F.Supp. 509, 515 (D.Md.1979).

A mere listing of the 12 Barber factors is inadequate as a basis for determining how large a fee award should be made. Anderson v. Morris, 658 F.2d 246, 248-49 (4th Cir.1981). The Anderson court stated that the district court must first ascertain the number of hours reasonably spent by counsel and multiply them by the "customary hourly rate." Id. at 249. This approach was determined to be "the most useful starting point" in calculating a fee award in the Hensley decision as well. 461 U.S. at 433, 103 S.Ct. at 1939. See also Blum v. Stenson, 465 U.S. 886, 896-98, 104 S.Ct. 1541, 1548-49, 79 L.Ed.2d 891, (1984). The party seeking fees should provide the court with evidentiary material supporting the time spent and the hourly rates claimed. Hensley, 461 U.S. at 433, 103 S.Ct. at 1939. The amount reached under this formula is what courts refer to as the "lodestar" or guiding figure. See, e.g., Vaughns v. Board of Education of Prince George's County, 770 F.2d 1244, 1246 (4th Cir.1985).

Once this initial lodestar amount is determined, the court has the option of adjusting the figure upward or downward based upon the other Barber factors. Hensley, 461 U.S. at 434, 103 S.Ct. at 1939. The court should briefly explain how each of these factors affect the award. Anderson, 658 F.2d at 249. An attorneys' fees request should not turn into a second major lawsuit, however. Hensley, 461 U.S. at 437, 103 S.Ct. at 1941.

The lodestar formula and the subsequent adjustment of it is made considerably more complicated when the plaintiff is considered to have "prevailed" and yet not succeeded on each claim for relief. Hensley addressed this issue directly by holding that claims based on "a common core of facts" or "related legal theories" should be viewed as a whole, with counsel receiving fees based on the "overall relief obtained...." Hensley, 461 U.S. 435, 103 S.Ct. 1940. Because this matter was examined so thoroughly in Hensley and because the question of the extent of the plaintiffs' success in the instant case has been raised by the defendants to justify a reduction in the fee award, it is instructive to review the relevant sections of the Court's decision in Hensley.

"In this situation two questions must be addressed. First, did the plaintiff fail to prevail on claims that were unrelated to the claims on which he succeeded? Second, did the plaintiff achieve a level of success that makes the hours reasonably expended a satisfactory basis for making a fee award?

In some cases a plaintiff may present in one lawsuit distinctly different claims for relief that are based on different facts and legal theories. In such a suit, even where the claims are brought against the same defendants — often an institution and its officers, as in this case — counsel's work on one claim will be unrelated to his work on another claim.

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